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COVID-19: US and EU support reimbursement

To the point While the travel credit is imposed by the airlines, the United States and the European Union have given their position.

This post is also available in: FR

Repayment or credit?

If there is a particularly hot topic in the travel world right now, it’s this: do airlines have the right to offer (read: impose) their customers a travel credit instead of a refund?

The COVID-19 pandemic situation is particularly difficult for everyone:

  • airlines have to face unprecedented cancellations, which impacts their cash flow and ultimately their survival
  • insurance companies are overwhelmed by the ongoing claims
  • credit card companies are facing an unprecedented level of chargeback requests
  • customers are themselves impacted in their lives and want to recover the money from their cancelled trip
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Aéroport

But while we are witnessing here and there major financial support plans towards the aviation industry from the different States, the latter are starting to ask the airlines to respect the legislation in force.

This is particularly true for two major markets: the United States and the European Union.

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The position of the United States

TheUS Department of Transportation (DOT) has just announced its position on the issue of refunds. And this one couldn’t be clearer:

The U.S. Department of Transportation today issued an Enforcement Notice clarifying, in the context of the 2019 Novel CoronavirusCOVID-19) public health emergency, that U.S. and foreign airlines remain obligated to provide a prompt refund to passengers for flights to, within, or from the United States when the carrier cancels the passenger’s scheduled flight or makes a significant schedule change and the passenger chooses not to accept the alternative offered by the carrier. The obligation of airlines to provide refunds, including the ticket price and any optional fee charged for services a passenger is unable to use, does not cease when the flight disruptions are outside of the carrier’s control (e.g., a result of government restrictions).

The Department is receiving an increasing number of complaints and inquiries from ticketed passengers, including many with non-refundable tickets, who describe having been denied refunds for flights that were cancelled or significantly delayed. In many of these cases, the passengers stated that the carrier informed them that they would receive vouchers or credits for future travel. Because the COVID-19 public health emergency has had an unprecedented impact on air travel, DOT’s Aviation Enforcement Office will exercise its enforcement discretion and provide carriers with an opportunity to become compliant before taking further action. However, the Aviation Enforcement Office will monitor airlines’ refund policies and practices and take enforcement action as necessary.

US Departement of Transportation - 3 avril 2020
american airlines yul phl msy 20
American Airlines

In summary, the U.S. Department of Transportation reminds airlines of various rules:

  • All airlines, U.S. or not, must reimburse passengers
  • For flights to, from and within the United States
  • When the flight has been cancelled by the airline
  • or when the flight has undergone a major schedule change or when the passenger does not accept the proposed alternative

And the U.S. Department of Transportation is strongly urging airlines to comply with these rules BEFORE other measures are put in place.

Thus, you are entitled to a full refund and not a travel credit if you had a flight with it:

  • Air Canada
  • Porter
  • Westjet
  • Air Transat
  • Sunwing
  • or any American airline (American, Delta, United…)
  • or any other company transiting through the United States (Asian, European company…)
  • from / to / within the United States

The U.S. Department of Transportation is going even further by encouraging airlines to contact passengers who have been offered a travel credit to offer them a refund instead!

However, you do not have to be the cause of the cancellation: in this case, you will have to comply with the rules of your ticket (or those more flexible introduced by the airlines).

The position of the European Union

The new European Union Transport Commissioner for 2019-2024, Adina Vălean, said:

Airlines must refund refunded flight tickets. They can of course also offer a voucher but – and this is very important – only if the customer agrees to accept this. If the customer does not want a voucher or other proposed solution, the company must reimburse.

Adina Vălean - 02 avril 2020
Air France Business Class Reviews and opinions - A350 - Toronto - Paris
Air France - A350 - Toulouse

Here again, the European Union wishes to remind that the rules in force continue to apply despite the COVID-19 pandemic.

However, you do not have to be the cause of the cancellation: in this case, you will have to comply with the rules of your ticket (or those more flexible introduced by the airlines).

What about Canada?

For the time being, the Canadian Transportation Agency maintains its position by approving the travel credit proposed by the airlines:

The various legislative, regulatory and tariff provisions were written for relatively localized short-term disruptions. None have been considered for the types of massive worldwide flight cancellations that have occurred in recent weeks as a result of the pandemic. It is important to consider how we will need to strike a balance that is fair and rational between measures to protect passengers and the operational realities of airlines in these extraordinary and unprecedented circumstances.

On the one hand, passengers who are unable to complete their planned itinerary with the assistance of an airline should not have to incur expenses for cancelled flights. On the other hand, airlines that are seeing their passenger volumes and revenues decline dramatically cannot be expected to take actions that would threaten their economic viability.

The Canadian Transportation Agency (CTA) will consider the merits of each specific situation presented to it, but generally believes that a solution that would appropriate in the current context would be for airlines to provide affected passengers with vouchers or credits for future flights that will not expire in an unreasonably short period of time (24 months would be considered reasonable in most cases).

Office des Transports du Canada - 25 mars 2020
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avion

Knowing that the Canadian government will soon commit to support the aviation industry, it would not be surprising to see this position evolve in favor of passengers.

Bottom Line

These are two important supports for repayment in lieu of travel credit.

This currently affects airlines only (not travel agencies, hotels or other providers). And of course, this is only a possible measure when the flight is cancelled. Not when you cancel it on your own.

If your flight is not cancelled at this time, please be patient. There is a good chance that it will be in the future given the current situation. This would make you eligible for a refund instead of a travel credit!

This post is also available in: FR

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Jean-Maximilien
Jean-Maximilien is an expert in Canada and France about Loyalty programs, Credit cards and Travel. He is the Founding President of Milesopedia.

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